Many years ago I was a young and ambitious person with a decent-paying job and a bright future. I also began to apply for and receive credit cards to expand my financial horizons.
These were the 1980s, though, and credit cards were a bit more difficult to get than today, when the companies are already sending my high school-aged teens applications. Still, as I began adding credit card debt, it became increasingly more difficult to get a mortgage (again, this was the 1980s, before the birth of the sub-prime lending market and 15-20% mortgages).
Within a few years I had purchased two new automobiles, and by 1987 my wife and I had accumulated over $20,000 in consumer debt. Banks looked at us with a wary eye when we started applying for mortgages, and the first two homes we purchased we had to go on land contract.
One of the smarter things we did as newlyweds was to seek a bill consolidation loan at a credit union. This allowed us to get a large chunk of our consumer debt down to a more reasonable 8-9% interest rate. Without this credit card debt consolidation, we would not have been able to qualify for the perks associated with good credit, such as low mortgage rates and ease of loan approval.
Ultimately, though, the best form of debt relief is self-discipline. The decision that ultimately improved our situation was a simple one: I physically cut all of our credit cards with the exception of one low-limit Visa, in case of emergencies, and we kept this card hidden away.
In addition, we began to pay small amounts over and above the minimum balance to whittle away at the principal. This type of debt management is good advice, but many consumers stay in the habit of paying the minimum each month, and never seem to get out from under their heavy debt loads.
It is useful to seek debt help from a reputable credit counseling firm, but ultimately the best help comes from within. I know this is anathema in an era of consumer binging, but living within one's means is more than a virtue: it's good financial advice.